BUDGET & BUDGETARY CONTROL - PowerPoint Presentation

1. BUDGET & BUDGETARY CONTROLD.VOC – II SemesterFDT- 201Mohd. SayeduzzamanLFT- Section, University Polytechnic, A.M.U. Aligarh

2. Budget It is a detailed plan defining or outlining the sourcing and uses and financial and other resources of the company in a given period of time. It is made or practiced to make the best use of resources (time, money, and energy.) In other terms, a budget is an organizational plan stated in monetary terms. It is a tool of management for planning its future activities including estimation of sales, expansion of Plants, Production etc. It is done for indicating the expected Results of the business and possible future time of action to be adopted for betterment.

3. A budget can be made for a person, family, group of people, business, government, country, multinational organization or just about anything else that makes and spends money. A budget is a microeconomic concept that shows the tradeoff made when one good is for anotherDefinition of Budget:-A budget is a quantitative expression of a plan for a defined period of time. It may include planned sales volumes and revenues, resource quantities, costs and expenses, assets, liabilities and cash flows.  A budget is a set of interlinked plans that quantitatively describe an entity's projected future operations. A statement of the financial position of an Organization for a definite period of time based on estimates of expenditures during the period and proposals for financing them.

4. BUDGETINGTo make a written statement of all the financial activities to be carried out for a well defined and definite period of Time is called Budgeting. It implies forecasting and planning performance of economical activities for a definite period of Time.Objectives of Budget:1. Planning. 2. Control. 3. Motivation. 4. Evaluation of Performance. 5. Accountability.

5. ControlBusinesses use budget for the purpose of control. Budgets help to prevent overspending. Not only by budget, expenditures can be monitored, but revenues inputs too can be look after.Budgets are not designed to stay the same. Business owners know that when there will be changes in it, however, budget give some guidelines to the firm and prescribe some sort of limits.MotivationBudgeting helps to motivate managers and employees to achieve budget goals.

6. Evaluation of Performance.Budgets are a valuable tool for owners to use to evaluate the performance of their firm at the end of the time period that a budget covers. Owners should look at actual expenses, for example, as compared to budgeted, or planned, expenditures. By doing this, the owner can see how much actual expenses varied from planned expenses in order to improve the budgeting process in the next time period.The same is true for the revenue side of the equation. Owners want to see if planned revenue equaled actual revenue as this will help them plan revenue inputs for the future.

7. AccountabilityIt also helps co-ordinate the activities of the organization by compelling managers to examine relationships between their own operation and those of other departments.Summary of Budgeting Purposes :-Tools provide a forecast of revenues and expenditures, that is, construct a model of how a business might perform financially if certain strategies, events and plans are carried out.Tools enable the actual financial operation of the business to be measured against the forecast.Lastly, tools establish the cost constraint for a project, program, or operation.

8. THANKS FOR WATCHIING Next Video Lecture on Budget will be on “Types of Budgets”By: Mohd. SayeduzzamanAsstt. Prof. LFT-SectionUniversity Polytechnic AMU. Aligarh